However, youth can blind you to the importance of that kind of long term concern, meaning that college students are often inundated with too many responsibilities with so little experience that things like finances can fall by the wayside.
Here are some tips to help college students start their adult lives with long term financial stability in mind.
Improve Your Credit Score
Credit is an important part of making bigger purchases like a car or a home, but a college student may not have really encountered it prior to moving out of the house. This can mean that a student runs the risk of ruining their credit score well before they have a chance to make use of it.
A person’s default credit score is ample in many cases, and maintaining or improving your credit score is fairly easy to do once you know how. Simply put, your credit represents how trustworthy you are when it comes to making agreed upon payments on time and consistently, and it can therefore impact your chances of making long term financial agreements like renting an apartment and eventually buying a home.
You can improve your credit score with a secured credit card by controlling the amount of payments in order to make absolutely sure that you never miss a payment, but you can also improve it simply by paying your bills on time.
Students who receive financial aid and rent a dorm on campus may not have bills to pay, however, but that also means a reduction in the risks of missing payments.
Begin Saving Now
Perhaps the most crucial part of your personal finances is saving money. While this is fairly self evident on the face of it, students are often not adequately prepared for that level of responsibility.
Having only recently left home, college age individuals across the board have trouble saving money, because this will be the first time many of them have ever had to put their money toward living expenses.
This means that it can be difficult for young people to eschew the leisures of their youth in favor of paying living expenses and putting money into a savings account.
Doing so is vitally important, however, so you should open a savings account immediately. By putting a portion of each paycheck, or any leftover financial aid, into your savings account on a regular basis, you can ensure that the balance of your savings continues to increase over time.
Reduce Recreational Spending
Another hallmark of the college experience is partying, for better or worse. Again, college students are typically getting their first taste of freedom, and so going all out to celebrate that freedom and unwind from time to time is a fairly natural response.
However, this often leads to students overspending on frivolous expenses, which can be a major detriment to your savings. Instead, you should minimize this kind of spending, but it’s worth noting that you should do so without eliminating them completely.
These expenses are important for maintaining mental health, but the opposite can be true of excessive spending. Doing so can also help your savings by simplifying the process of budgeting.
other valuable tips:
Federal Financial Aid Requirements – Are you Eligible?
5 Ways for College Students To Jumpstart a Healthy Financial Future
Budgeting
Budgeting is an important part of making sound financial decisions, as it allows you to visualize your spending in order to maximize its long term value. Doing so requires keeping a record of how much you spend and categorizing that spending.
This can allow you to reduce recreational spending, prioritize saving, and know how much you’re saving on off brand purchases, for example.You can use pay stubs and receipts to get an idea of what you’re already spending, but you’ll then need to find ways to make those numbers look the way you want them to.
Finances may be outside of the purview of the average college student, but that doesn’t have to be the case. There are ample examples of how to save your money or spend it wisely, but you have to look for them. These simple tips can help you start your journey toward financial security while you pursue your education.
Image Credit: financial head start by twenty20.com
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